Do-It-Yourself Contract? When to Call in the Pros

DIY is a fun and hip way to transform everything from an ugly coffee table to your grandfather's old VW bus. So when you need a contract, why not do that yourself, too?

After all, lawyers can be expensive. You've seen sample contracts online—how hard could it be to patch those together and write your own?

As it turns out, it's harder than you think. The purpose of a contract is to protect you when everything falls apart. Lawyers are trained to write solid contracts that can be enforced in court. For anyone else, it's easy to get lost in the legalese and end up with a contract that's useless because it's vague, has loopholes, or is missing key information.

Here's how to tell when you can handle a contract on your own, and when you need a pro.

Risky business: Piecing together your own contract

Plenty of free sample contracts are available online, and it seems easy enough to substitute the names, dates and facts that fit your situation. But this approach can raise serious problems.

• The form you're using may not follow your state's laws.
• The form may be outdated.
• Your patchwork contract may leave out important information that could make it hard to enforce. For example, a lease must say where the property is located. Noncompete agreements typically aren't enforceable if they don't include a time and/or location limit.
• You may accidentally include clauses that aren't in your best interest. Contracts are usually written to favor the person writing the contract. If you are using a sample that was written by someone on the other side of a transaction similar to yours, you may be offering up a contract that helps the other party, not you.

Unless you are a lawyer or have lengthy experience working with the type of contract you're piecing together, the risks of this DIY approach can far outweigh the cost savings.

Online templates: Sometimes a good choice

Online templates can be a good, low-cost option for creating contracts. Typically, you'll answer questions and then generate a contract that fits your situation. The best online templates are tailored to the state you live in, and they produce contracts that have been written by attorneys who know your state's laws.

Online templates can be a good, low-cost solution to basic contract needs such as leases, purchase agreements, bills of sale and nondisclosure agreements. They work best for common, relatively uncomplicated transactions that don't involve massive sums of money.

For example, an online template might be a good choice if you need a simple nondisclosure agreement before sharing your business files with an independent contractor. But an online template isn't meant for complicated or specialized transactions — like leasing an office building to multiple tenants with individual build-out requirements, buying a business or nailing down a long-term project worth hundreds of thousands of dollars.

When to call a lawyer

Sometimes, no template fits your specific situation. Or you need advice about what your contract should contain and how to negotiate it. Here are some situations in which it makes sense to call in a lawyer to help—whether you're preparing the contract or being asked to sign a contract written by someone else.

• The contract is for a very specific transaction. An example would be a contract to perform a project over several months, with various deliverables and payments.
• The contract is for an ordinary transaction, but with some unusual wrinkles. For example, you're leasing your home to someone who will be breeding pit bulls there and paying you a percentage of their profits.
• The contract involves a large sum of money. When more money is at stake, it makes sense to invest up front in legal advice.
• The contract is specific to your industry and you aren't sure what the customary contract terms are. A lawyer with industry experience can make sure you are treated fairly.
• You are being asked to sign a contract drafted by someone else. In general, people prepare contracts that favor them. A lawyer can review a contract, explain its terms and help make sure the contract isn't unfair to you.

Crafts and home repairs are great projects for DIY-ers. But when it comes to contracts, you'll have better protection if you have input from a lawyer.